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Education Laws and Regulations

603 CMR 50.00
Educational Collaboratives

Section:
50.01:
50.02:
50.03:
50.04:
50.05:
50.06:
50.07:
50.08:
50.09:
50.10:
50.11:
50.12:
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50.07: Finance

(1) Financial Accounting System: Each collaborative shall adopt and maintain a financial accounting system in accordance with generally accepted accounting principles as prescribed by the governmental accounting standards board and any supplemental requirements prescribed jointly by the Commissioner and the Commissioner of Revenue, in consultation with the State Auditor. At a minimum, the financial accounting system shall delineate:

(a) administration and overhead;
(b) rental of real property;
(c) program costs;
(d) capital expenditures, including fixed assets, real property or the improvement of real property;
(e) debt payments;
(f) deposits into a capital reserve; and
(g) all additional disclosures required in 50.08 (2).

(2) Education Collaborative Fund: The collaborative board of directors shall establish and manage an education collaborative fund. All monies paid by the member districts and non-member districts and all grants or gifts from the federal government, state government, charitable foundations, private corporations, or any other source shall be paid to the collaborative board of directors and deposited in the fund. The treasurer of the collaborative, subject to the direction of the collaborative board of directors, shall receive and disburse all money belonging to the collaborative without further appropriation.

(3) Revenues: The collaborative board of directors may apply, through an appropriate vote, for state, federal, corporate, or foundation grants, and may enter into contracts to obtain the funds necessary to carry out the purpose for which the collaborative was established.

(4) Purchasing: An educational collaborative, acting through its board of directors, may, subject to chapter 30B, enter into contracts for the purchase of supplies, materials and services and for the purchase or leasing of land, buildings and equipment as considered necessary by the board of directors.

(5) Creating the Annual Budget:

(a) The collaborative board of directors shall follow the process outlined in the collaborative agreement for the development and approval of the collaborative budget, tuition rates, membership dues and fees-for-service. On an annual basis the collaborative board of directors shall propose a budget for the upcoming fiscal year. The proposed budget shall contain all planned financial activity. Expenditures from grant funds, trust funds and other funds not designated as general funds that by law may be expended by the collaborative board of directors without further appropriation shall be segregated in the budget. The general fund budget shall segregate all operating expenditures, capital expenditures, debt service payments and deposits to capital reserve. The proposed budget shall be classified into such line items as the collaborative board of directors shall determine.
(b) All financial activity for the operation of the collaborative shall be considered general fund activity with the exception of activities relative to grants, gifts or contracts.
(c) The budget shall delineate the tuition rates, membership dues and fees-for-service to be paid by the member districts and non-member districts.
(d) Tuition rates and fees-for-service shall be based on the combined cost of providing collaborative programs and services.
(e) The proposed budget shall be discussed at a public meeting of the collaborative board of directors. Public notice shall be given to member districts.

(6) Approving the Collaborative Budget:

(a) At a collaborative board meeting at least ten working days following the board meeting at which the collaborative budget was first proposed, the collaborative board of directors shall approve, by at least a majority vote, the collaborative budget for the upcoming fiscal year.
(b) The treasurer of the educational collaborative shall certify and transmit the budget and the tuition rates, membership dues and fees-for-service for the upcoming fiscal year to each member district in a timeframe specified in the collaborative agreement.

(7) Amendments to Approved Budgets:

(a) Any amendment to the budget must be approved by the collaborative board of directors.
(b) Any amendment to the budget that results in an increase in the tuition rates, membership dues or fees-for-service shall also be provided to the member districts in accordance with a timeframe and process outlined in the collaborative agreement.

(8) Borrowing: The collaborative, by an appropriate vote of the board of directors, may borrow money or enter into short- or long-term agreements or mortgages, provided that when the borrowing or short- or long- term agreements or mortgages are for the approved acquisition or improvement of real property:

(a) the collaborative board of directors shall provide notice to each member district within 30 calendar days of applying for real estate mortgages; and
(b) the collaborative board of directors shall discuss its intent to apply for a real estate mortgage at a public meeting of the board of directors prior to the meeting of the collaborative board of directors at which the final vote is taken.

(9) Limitation on Surplus Funds: At the close of the fiscal year, unexpended general funds may be carried forward and used in subsequent budget cycles. These unexpended general funds are determined to be the current surplus. Cumulative surplus is derived by adding prior year surplus funds to the current year surplus funds. The collaborative agreement shall include a limit on the amount of cumulative surplus funds that may be maintained by the collaborative. The collaborative board of directors shall annually approve by majority vote the dollar amount designated as cumulative surplus. The board of directors shall vote annually to retain the cumulative surplus funds for the collaborative's use or return all, or some portion, of the funds to the member districts. The collaborative agreement shall address how and under what conditions such surplus funds may be returned to member districts or credited to support programs and services offered to member districts and how such funds will be allocated to such member district(s) upon the withdrawal of a member district or the termination of the collaborative. The determination of surplus funds shall not include funds deposited in a capital reserve as provided for in 603 CMR 50.07(10), funds deposited in trust in accordance with M.G.L. c. 32B, § 20, or funds prepaid to the collaborative for tuition or services in accordance with M.G.L. c. 40, § 4E. In no event shall such cumulative surplus funds exceed 25 percent of the previous fiscal year's general fund expenditures.

(10) Capital: The educational collaborative may create a capital reserve fund to support costs associated with the acquisition, maintenance, and improvement of fixed assets, including real property, pursuant to a capital plan.

(a) Funds in a capital reserve account may be used only for the project or purpose for which the account was established.
(b) The establishment of a capital reserve shall be subject to the approval of two-thirds of the member districts. The request for approval must state the reason for the reserve and a limit on the balance that may be held in the reserve.
(c) Deposits into the capital reserve shall be proposed and approved through the budget process.
(d) In the event that the purpose for which the capital reserve was created requires modification, the collaborative board of directors shall revise its capital plan and provide notice to all member districts. If the member district does not vote to disapprove the revised capital plan within a 45 day period, that member shall be deemed to have approved the revised capital plan. Two-thirds (2/3) approval of the member districts is required to revise the capital plan.

(11) Annual Financial Statements: Each collaborative shall annually prepare financial statements, including:

(a) a statement of net assets (government-wide);
(b) a statement of activities (government-wide);
(c) a governmental funds balance sheet;
(d) a governmental funds statement of revenues, expenditures, and changes in fund balance;
(e) a general fund statement of revenues, expenditures and changes in fund balance, budget and actual;
(f) a statement of fiduciary net assets;
(g) a statement of changes in fiduciary fund net assets; and
(h) a capital plan identifying current capital obligations or future planned capital projects.

(12) Audit: Each collaborative shall annually have an independent audit conducted of its accounts, in accordance with generally accepted government auditing standards, and consistent with any guidelines the Department may issue. Such audit will be conducted consistent with 603 CMR 50.08(2). Audit results shall be discussed annually at a public meeting of the collaborative board of directors.

Regulatory Authority:
M.G.L. c. 69, §1B, and M.G.L. c. 40, § 4E



Last Updated: February 6, 2013
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